IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
KUMASI - A.D 2018
JOHN ADU - (Plaintiff)
CHARLES KWADWO KORANKYI AND ANOTHER - (Defendant)
DATE: 23 RD JULY, 2018
SUIT NO: OCC 202/2015
JUDGES: DR. RICHMOND OSEI-HWERE JUSTICE OF THE HIGH COURT
On the 3rd of July, 2015 the Plaintiff instituted an action against the 1stand 2ndDefendants jointly and several for the following relief:
“The recovery of 30% of the said project or in alternative an Order to enforce the Agreement between the Parties.”
The plaintiff’s case is that he is a building contractor and sometime in 2007, he entered into an agreement with one Opanin Kwame Mpianin to demolish his family house and rebuild it into stores. In furtherance of the said agreement and in his quest to raise funds to finance the project, it is the
plaintiff’s case that he contacted the 2nd defendant who agreed to partner him to execute the project. The plaintiff stated that he agreed with the 2nd defendant that he shall be entitled to 30% of all the proceeds that would be realized upon completion of the project. In sum, the plaintiff’s case is that the defendants have reneged on their promise relating to his entitlement of the proceed of the project and that has led to the instant action.
The defendants’ case is that there is no partnership agreement between them and the plaintiff. It is also their case that they personally entered into contract with the said Opanin Kwame Mpianin and his family in relation to the project. They aver that the plaintiff is not entitled to his claim and that all he is entitled to is an agency fee of GHC 2,500.00. After unsuccessful attempts at settlement, the following issues were set down for trial namely:
(a) Whether or not the Defendants agreed to give (30%) of the proceeds realized from the project undertaken by the 1st Defendant to the Plaintiff.
(b) Whether or not the parties agreed that the Plaintiff was entitled to (10%) commission on the total sum of (GHC2,500.00) to be paid by the 1st Defendant to Kwame Mpianim and members of his family.
(c) Whether or not the Plaintiff is entitled to any of the stores/flats constructed by the 1st Defendant.
(d) Whether or not the Plaintiff made any financial contribution towards the construction of the stores/flats.
(e) Whether or not there is any oral agreement between the parties.
(f) Whether or not the Plaintiff is entitled to his claim against the defendants.
The crux of the case is that the plaintiff is demanding 30% of the proceeds from the construction of stores at House Number 33, Dr Mensah, Kumasi in line with the purported partnership agreement between him and the defendants.
To succeed in his claim, the plaintiff is required to prove his case to the required standard in civil suits, that is by the preponderance of probabilities as required by sections 11(4) and 12 of the Evidence Act, 1975 (NRCD 323). In other words, the Plaintiff must demonstrate to the satisfaction of the court that his case is more probable than not, else he loses. Thus, in Takoradi Flour Mills v Samir Faris [2005-2006] SCGLR 882 at 884, the Court held as follows:
“It is sufficient to state that being a civil suit, the rules of evidence require that the Plaintiff produces sufficient evidence to make out his claim on a preponderance of probabilities, as defined in section 12 (2) of the Evidence Decree, 1975 (NRCD 323). In assessing the balance of probabilities, all the evidence, be it that of the Plaintiff or the Defendant must be considered and the party in whose favour the balance tilts is the person whose case is the more probable of the rival versions and is deserving of a favourable verdict.”
I shall proceed to discuss the issues to ascertain whether plaintiff has led cogent evidence to establish his claim. I shall tackle all the issues together as they are inextricably linked. At the heart of all the issues is whether there was a partnership agreement between the parties. It is apparent from the record that the plaintiff did not contribute financially towards the execution of the project. His claim to the 30% stake is the fact that he secured the contract for the building works. The following transpired at pages 4 and 5 of the record of proceedings during cross examination of the plaintiff:
Q: Tell the Court who paid that amount to the family members for resettlement?
A: I collected the money from the 1st Defendant. He gave me the money because he had agreed to enter into partnership with me in execution of the project
Q: Who paid for the demolition cost?
A: I collected money from the 1st Defendant because he agreed to work with me and any money I asked from him he gave it to me.
Q: You will agree with me that right from the inception of the project to its completion you did not contribute a pesewa to it?
A. I have not contributed financially to it but I secured the contract and the 1st Defendant agreed to make financial contribution to the execution of the project. We agreed to work together as partners.
Q: If I am right your only contribution was in respect of securing the contract?
The plaintiff called two witnesses in his bid to corroborate the fact that there was a partnership agreement between himself and the defendants. He called one Oppong Kyei who described himself as a journalist. The witness told the court that he received a complaint from the plaintiff and after investigations he came to the conclusion that there was a partnership agreement between the plaintiff and the defendants. When he was asked to explain the basis of his conclusion, he stated at page18 of the record of proceedings as follows:
“I first visited the site in which the construction was on going and did some investigations there by asking the people around particularly the workers some questions. I also visited the original occupant of the house at their new location and did some investigations there. I also visited the 2nd Defendant at her shop and had some discussions with her. She promised to visit my office together with her husband when he returns of which they did. They came to give us their side of the story and promised to revisit but this was never so. Any time I call the 2nd Defendant she gave excuses as to the whereabouts of the husband.”
The following also transpired during the cross examination of PW 1 at page18 of the record of proceedings:
Q: In your witness statement you again stated that you personally got in touch with the owner of the house?
A: That is correct.
Q: Tell the Court if you know the name of the Land Lord?
A: I cannot remember the name presently but I wrote it down
Q. Your account that upon meeting the landlord same informed you they negotiated with the Plaintiff for the construction of the new building is never true.?
A: That was what I heard when I went there. I now say that is what they told me.
The plaintiff also called one Albert Kwame Twumasi as PW 2. He testified that he was in the company of the plaintiff when he negotiated with the landlord, Kwame Mpianin in relation to the lease of the latter’s dilapidated property. From the various testimonies, there is no doubt that the plaintiff somehow participated in the negotiation process with the landlords. As to whether, the plaintiff participated in the negotiation process as a partner of the defendants is what is in doubt considering the evidence of PW 1 and PW 2 alone. The extent of his participation is not clear but from the totality of the evidence, it is clear that it was the plaintiff who introduced the defendants to the landlords. About that, more anon!
The defendants, on the other hand, tendered Exhibit 1 which shows clearly that the plaintiff was not a party to the agreement between the 1st defendant and the landlords of the disputed property. For the sake of brevity, I reproduce the preamble of the agreement as follows:
“THIS SUB-LEASE is made the 19th day of October in the year of Our Lord Two Thousand and Nine (2009) Between the Landlords of No. KO. 33 Ashanti New Town Kumasi, Messrs. Socrates Kwame Mpianim and Benjamin Osei of P. O. Box KS 835 Kumasi hereinafter called the Sub-Lessors (which expression shall where the context admit/require include successors intitle or Assigns) of the first part AND Mr. Charles Kojo Korankye, Managing Director of Mark-K Construction Company Ltd, P. O. Box 9530 Airport Accra, hereinafter the Sub-Lessee (which expression shall where the context admit/require include successors intitle or Assigns) of the other part.”
The profound question remains: was there a partnership agreement between the plaintiff and the defendants? Under Ghanaian law, partnership comes into existence after incorporation. Section 4(1) of the
Incorporated Private Partnerships Act, 1962 (Act 152) provides:
“After the expiration of three months from the commencement of this Act, it shall not be lawful for a partnership to carry on business unless the firm shall have been duly registered in accordance with section 5 of this Act and not struck off the register under section 51, 52 or 53 of this Act.”
From the evidence on record, no partnership agreement was executed by the parties. Consequently, no partnership agreement was incorporated. It therefore goes without saying that there was no partnership between the plaintiff and the defendants. Also, there is no evidence to show that there was any form of joint venture between the plaintiff and the defendants in respect of the project in issue. If indeed the plaintiff had a stake in the project his name would have been captured as a contracting party under Exhibit 1. The result is that the plaintiff is not a partner of the defendants insofar as the project in issue is concerned. He is therefore not entitled to his claim.
However, it goes without saying that the plaintiff acted as an agent of the defendants. Professor G.H.L. Fridman in his book The Law of Agency (Butter worths 7th edition, London 1996) at page 11 defines agency as:
“The relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position in respect of strangers to the relationship by the making of contracts or disposition of property.”
In State v Asantehene’s Divisional Court; Ex-parte Kusada GLR 238,Korsah CJ defined agency based on the estoppel model as:
‘‘where one has so acted as from his conduct to lead another to believe that he has appointed someone to act as his agent and knows that other person is about to act on that other person’s behalf, then unless he interposes, he will, in general be estopped from disputing the agency, though in fact no agency really existed’’.
Section 26 of the Evidence Act, 1975 (NRCD 323) discusses estoppel by own statement or conduct as follows:
“Except as otherwise provided by law, including a rule of equity, when a party has by his own statement, act or omission, intentionally and deliberately caused or permitted another person to believe a thing to be true and to act upon such belief, the truth of that thing shall be conclusively presumed against that party or his successors in interest in any proceedings between that party or his successors in interest and such relying person or his successors in interest.”
The importance of this type of estoppel is that a person who by his words or conduct willfully or negligently causes another to believe in the existence of a certain state of things and induces him thereby to act on that belief or to alter his position is estopped from asserting against the other person that a different state of things existed at that time. In agency, if a party by his words or conduct has allowed a party to appear to the outside world to be his agent, with the result that outsiders deal with him as his agent, that person cannot afterwards be allowed to repudiate this apparent authority if to do so would cause injustice to third parties or to the agent himself, then that person is deemed as having actually authorised the agent. In agency by estoppel, no relationship may exist between the parties but by the operation of the doctrine of estoppel a relationship of agent and principal may be established between them. The principle may also operate where an agent has authority but has exceeded it. This is because an apparent or ostensible authority may be resorted to augment the agent’s actual power.
As observed earlier on, it was the plaintiff who introduced the defendants to the landlords leading to the sub lease agreement in Exhibit 1.The plaintiff acted as agent of the defendants when he contacted the landlords over the property. This fact was at all material times known to the defendants. In fact, per paragraphs 12 and 13 of their witness statement, the defendants acknowledged that it was the plaintiff who told them about the property and subsequently introduced the said Kwame Mpianin to them as a landlord. Prior to that, the plaintiff had, according to the defendants introduced himself to them as an agent. Clearly, there was no written agency agreement between the parties but the defendants by their words and conduct have allowed the plaintiff to represent to third parties (in this case the landlords) that he is their agent. They are therefore estopped from denying the agency relationship. As an agent the plaintiff deserves to be rewarded for his stewardship. This is in spite of the fact that the plaintiff never made such a claim in the writ of summons and statement of claim.
The ethos of substantial justice, however, gives the court the power to go into issues which are not pleaded but can be deduced from the pleadings. In determining the reward, I have taken cognizance of the terms of the sub lease agreement which involves the construction of over 50 stores/offices and other facilities. In the circumstance, I hold that an agency fee of GHC25, 000.00 is a just and adequate form of compensation for the plaintiff considering the fact that the transaction occurred in 2009.
Consequently, I order the defendants to pay an amount of GHC25, 000.00 to the plaintiff forthwith.